First thing this morning, I was scheduled for an upper endoscopy. As the anesthesiologist prepared to put me under, he asked what I did for a living and I explained that I was a CPA who also writes about tax law, and that today was a critical day in the tax reform process. He then asked me about what I though the GOP’s plan would be, and as I got into the finer points of budget reconciliation, deficit-neutral tax reform, and dynamic scoring, sleep finally set in.

Ok, on to what you came here for. Last week, President Trump, in his preferred manner of speaking in absolutes, said the following when pressed on the pace of tax reform:

We have a tax plan that’s totally finalized.

Earlier today, the President, along with the so-called “Big 6” — Treasury Secretary Steven Mnuchin, Speaker of the House Paul Ryan, Chairman of the House Ways and Means Committee Kevin Brady, National Economic Council Director Gary Cohn, Senate Finance Chairman Orin Hatch, and Senate Majority Leader Mitch McConnell, Republicans all — unveiled their tax plan, and lo and behold, it IS in fact finalized, if by “finalized” you mean, “Seven pages of general highlights and a disturbing absence of detail.”

But hey, don’t be too hard on the Commander in Chief and the Big 6 (excellent band name); after all, tax reform is hard. To illustrate just how hard it is, let’s take a look at the parts of the plan that were made public today, and how each one presents significant challenges, both in regard to being politically palatable and economically feasible.

But first, let’s understand the biggest of all the challenges facing tax reform: fitting $5 trillion in tax cuts into a $1.5 trillion budget.

The items in this blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. A select group of Tax Professionals of WithumSmith+Brown write Double Taxation, and any opinions expressed or implied are not necessarily shared by anyone else at WithumSmith+Brown.

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